Apple is borrowing money rather than using its cash reserves, says the paper, because it can earn more than it’s paying in interest.
Apple is currently absorbing the cost of these, which will reduce its margins and earnings.
Why Apple is borrowing $7 billion while sitting on a $200 billion cash pile?
Apple is sitting on a $200 billion cash pile, making it one of the most cash-rich companies in the world. This means that companies looking to borrow can find lower rates for longer bond durations.
Does Apple have any debt?
Apple’s EV went from $600 billion at the end of 2017 to $1.12 trillion, doubling. This comes as the company’s market cap and cash have risen steadily. With that, Apple’s net debt has fallen from nearly $50 billion last year to $14 billion as of the second quarter of 2019.
How much cash does Apple have right now?
Apple now has $245 billion cash on hand, according to its first-quarter 2019 earnings report. That’s 3 percent more than it had on hand in the previous quarter, when it reported $237.1 billion in cash.
Why do companies borrow money when they have cash?
Use The Investment To Make More Than It Costs To Borrow
They use the funds to generate enough profits to more than cover the cost of borrowing. Taking out credit, whether it’s a business loan, invoice finance or an overdraft, allows them to invest in more sales, creating more profit.
How much cash does Apple have 2020?
Today after the bell, Apple reported the results of the first quarter of its fiscal 2020. The company’s revenue totaled $91.8 billion, far ahead of expectations of $88.43 billion. At the same time, the company’s per-share profit of $4.99 was greater than the market-anticipated figure of $4.54 per share.
How much is Apple in debt?
Apple’s operated at median total debt of $108 billion from fiscal years ending September 2015 to 2019. Looking back at the last five years, Apple’s total debt peaked in December 2019 at $116.8 billion. Apple’s total debt hit its five-year low in September 2015 of $64.341 billion.